The record industry better hope that Wednesday's Apple announcement is big news--apparently pretty good. According to an analysis in today's Billboard Online, the usual summer slump in digital download sales is more pronounced this year, and ringtone sales continue their steep decline. For an industry that's counting on digital to make up for declines in CD sales, that's very unwelcome news., perhaps the addition of recordings from some obscure 1960s rock band who were
The author, Glenn Peoples, suggests that ringtones and a new album format on iTunes could help, but there's another possibility that I haven't seen mentioned elsewhere: what if Apple takes the plunge into subscription-based music? So far, subscriptions haven't been a successful business model, but I'm not convinced it's because the idea is flawed. The problem is that no subscription service has been available for the iPod or iPhone. ( is too new, and not available in the U.S., so I don't count it yet.) Look at : it doesn't even let you choose individual songs, but once users realize that they have on-demand access to an infinite library of music, they can't seem to stop raving about it.
Imagine if Apple combined a new subscription service with the iTunes scorned the idea of a video iPod as well.function, which is conceptually similar to Pandora but currently limited to your existing music collection. (It also recommends songs in the iTunes store, but you have to buy them individually, which kind of ruins the delightful-surprise factor.) How much would you pay for that? Now multiply that by some percentage--20 percent might be reasonable--of present and future iPhone and iPod Touch users, and suddenly you're talking about meaningful annual revenue. I know that Steve Jobs has insisted that customers want to own rather than rent music, but remember that he once
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